Television digest with electronic reports (Jan-Dec 1956)

12 Philco," said spokesman, "and we won't be satisfied until we're No. 1." It seems evident that more changes will be made shortly in appliances, for this has been the poorest part of Philco 's over-all business. And, though no figures are disclosed, TV market men agree that GE has taken over Philco 's No. 2 position in TV. m * * * Distribntion Probe: Senate Small Business Committee's projected investigation of TV-radio-appliance distribution (Vol. 12:42-43), slated for early next year though no date for hearings has been set, is likely to be considerably broader than first indicated. Current thinking of committee staff is that probe will consider rising trend of mergers, acquisitions, part ownerships, et al in TV-radio-appliances. The Whirlpool-Seeger combine, in which RCA and Sears each owns about 20%; Philco^ s purchase of Bendix; Admiral's acquisition of Raytheon's TV-radio business are cited by committee spokesman as examples of topics likely to be covered. Also due for consideration is question of why more than 30 TV-radio or appliance manufacturers without full lines have gone out of business in last 2 years and what effect this has had on accelerating full-line production and/or distribution. "Far more than franchise problems are involved," said spokesman. "We've come to realize that no thorough study of distribution could be undertaken without taking up mergers and other problems relating to economic concentration." Incidentally, it's also learned that Sen. O'Mahoney (D-Wyo.), chairman of Senate Judiciary antitrust subcommittee, is also interested in economic concentration in appliance industry. He refrained from extensive questioning of General Motors officials about operations of Frigidaire div. in 1955 probe of auto franchises because it was anticipated that subcommittee would take up appliances later. It's understood that any legislation resulting from Small Business Committee probe would have to be taken up in hearings by O' Mahoney subcommittee. How io Make TV Profitable: How goes it with a big private-label manufacturer in these days of increasing mortality among own-brand set makers? Robert Alexander, pres, of Wells-Gardner & Co., prime TV-radio supplier for Montgomery Ward, tells us that his company's unit TV sales will be higher this year than in 1955, and that TV profits will be about same as year ago. In an industry bemoaning shrinking profits, that's tantamount to a declaration of all-out affluence. But Alexander quickly provides the reason: "Remember that we do not make any set smaller than a 21-in. table model, and we make very few of those. Our production is concentrated on higher-end receivers where the profit margins are greater." He said none of his customers had called yet for color sets, but that his company is prepared to produce them now. He also commented that competition in private-label business has been reduced recently, notably by Raytheon's decision to leave TV-radio. Prodaclion: TV output totaled 176,626 week ended Nov. 9, compared with 196,032 preceding week and 171,921 in corresponding week of 1955. It was year's 45th week and brought production for year to date to about 6,453,000, compared to 6,836,071 in corresponding period year ago. Radio production totaled 335,630 (145,761 auto) week ended Nov. 9, compared with 358,217 (152,139 auto) preceding week and 403,488 (188,314 auto) in corresponding week of 1955. For 45 weeks, radio output totaled 11,527,000 (3,905,422 auto) vs. 12,090,138 (5,770,576 auto) in same period year ago. Quoteworthy quote: “Trade-ins can be extremely valuable to the dealer who is willing to recognize them. The dealer who has set up a proper appraisal system, who reconditions the trade-in to a reliable condition and then merchandises, is only following through on a routine that has proven itself successful in any business throughout the years. To slough trade-ins off at wholesale is only to do yourself and your market harm.” — Motorola gen. sales mgr. Allan G. Williams to Iowa Appliance Dealers Assn. Howard W. Sams Inc. (J. A. Milling, pres.) reports that Oct. was biggest month in its history, with gross volume of $.‘185,000. .Jerrold Electronics now marketing “Trap-Ease,” adjacent-channel trap for TV receivers, at $19.95. Average profits of 33% are netted by Puerto Rico’s 43 electronics manufacturers, in contrast to 5% profits made by comparable mainland industry group, according to Teodoro Moscoso, Economic Development Administrator of the island. In first profit reports on Puerto Rican 10year tax-free “Fomento” program to attract U. S. industries, he told N. Y. Rotary Club Nov. 15 that manufacturers taking advantage of it reap about 16% on sales generally, compared with 5% on mainland. Recommended reading: “BDSA — the Businessman’s Agency in Govt.,” interview with Business & Defense Services Administration’s Electronics Div. chief Donald S. Pariis, explaining functions of that agency as they relate to electronics industry, in Nov. 12 Electronic Week. I